Hi
You need to look at (adjusted NCI)/NWP to calculate the INCR figures.
The NWP is just 78% of the GWP.
Firstly, take your GCI, adjusted to allow for the 10% surplus. You want the corresponding adjusted NCI given by
Adjusted NCI = Adjusted GCI – RR.
The RR comes from the quota share and risk XL contracts. The RR from the quota share is just 20% of the adjusted GCI. For the RR from the risk XL contract, you need to look at the table of large losses given (remembering to adjust for the 10% surplus).
This gives the INCRs for the last two years shown in the solution.
I hope this helps.
Duncan
Last edited: Jul 20, 2010